VC's credit rating increases

By
KBell
March 19, 2012 at 7:01 p.m.Updated March 18, 2012 at 10:19 p.m.

Victoria College's financial standing received a lift Monday when its credit rating rose to "AA."

Standard & Poor's rating is a step up from the college's previous "A+" rating.

In a letter to the college, the financial services company outlined the reasons for the rating, which it said has a stable outlook. Factors included in Standard & Poor's analysis are VC's presence in a stable regional economy, good income levels, a history of operating surpluses and good revenue diversity with flexibility in property tax rates.

"The stable outlook reflects our anticipation that the district's large and diverse property tax base will remain stable and that management will likely sustain its healthy financial position, coupled with the ongoing demand for the college's educational services," the letter read.

Strong retail activities and a diverse tax base were also considered in the rating. Standard & Poor's assessed the college's financial management as "good," based on its monthly budget status reports and investment reviews.

The letter also mentioned the district lacks a debt management plan, which is performed by VC management but not formalized.

VC has about $1.5 million left to spend on a 2006 bond for $15.5 million, said Keith Blundell, vice president of administrative services. The 20-year bond built the Health Science Center and renovated the Allied Health building.

May's ballot will include another bond proposal from VC, this time for $22 million for an Emerging Technologies Center that would provide workforce and continuing education training off-campus.

The rating was sent to VC board members and introduced at Monday's regular meeting, where trustees also approved tuition and fee changes for workforce and continuing education.

Victoria College will pass on savings to students taking skills trade classes next year thanks to a partnership with the Construction Education Foundation.

In lieu of VC leasing office space for CEF to be housed at the college, CEF will waive the usual $50 fee students have paid for a certification from the National Center for Construction Education and Research.

"It's a savings directly to the student," said Jennifer Yancey, vice president of college advancement and external affairs.

The savings for students ranges from $100 to $140 depending on the class, which include electrical, HVAC, pipefitting, welding and millwright classes. Tuition for these classes range from $175 to $1,150.

More savings will be passed along to students because of a new textbook policy that won't require students to pay for personal books. Instead, VC will provide a set of classroom textbooks.

Included in the changes are new courses like Emergency Procedures, Dealing With Difficult People and several real estate classes.

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CREDIT RATINGS

Standard & Poor's assigns credit ratings to governments, corporations and financial institutions, among others. The rating is an opinion on the general credit-worthiness of an entity.According to the company's website, a "AA" rating means the entity is "very strong capacity to meet financial commitment."An "A" rating means it has "strong capacity to meet financial commitments, but is somewhat susceptible to adverse economic conditions and changes in circumstances."Ratings range from "AAA" to "D."Standard & Poor's in August downgraded the United States' credit rating from "AAA" to "AA+."SOURCE: www.standardandpoors.com